When I was younger, I thought being a mega-successful entrepreneur like Richard Branson or Michael Dell was a matter of cleverness. If you were just clever enough to figure out the right market opportunity, then you could make millions.
How wrong I was.
Take Richard Branson. For his very first entrepreneurial undertaking — when he was still just a teenager — he purchased young Chrismas Trees, planted them during the spring, and then resold them at a profit during Christmas time in the winter. I actually do think that’s pretty clever, especially for a kid. But really that’s as far as “clever” alone will take you.
Branson’s next undertaking was the founding of Student Magazine. At that point, he had to have the leadership and people skills to:
- Recruit a staff
- Sell advertising
- Inspire the staff to produce the magazine
- Negotiate business deals
…and so forth. And in spite of all of that, they were always short on cash, barely broke even, and still ultimately had to close down eventually (though not before snagging interviews with John Lennon and other really high-profile people!).
Student Magazine was actually brilliantly innovative at the time. Before then, at least in the UK, there was no such thing as a magazine that targeted students. Today, there’s plenty of media targetting kids (ahem, WB), but at the time it was a really novel idea.
Anyway, eventually Branson quit the magazine and decided to run a record store — the original Virgin Music. Branson and his cohorts actually called it Virgin because they figured they were all virgins at business (and they liked the edginess).
Over time, Branson had to:
- Negotiate a lease for the space
- Negotiate with record companies to get music in the store
- Recruit staff
- Motivate staff
- Keep a cool environment while still making a profit
- Help sell records to customers
- Figure out what the hottest new records would be so he could stock the store right
Actually, for that last one, Branson didn’t even do it himself. He had an assistant whom he described as brilliantly gifted at predicting the latest trends in music. Based on his expertise, Virgin always stocked very hot and edgy artists.
Branson eventually went on to expand the record store to multiple locations, to raise money to purchase a mansion which he turned into a recording studio, to start a music produciton company, to sign major bands like the Sex Pistols, and eventually to sell it all for somewhere in the neighborhood of $500 million.
Incidentally, I’m getting all my information from the very entertaining read: Losing My Virginity: An Autobiography of Richard Branson.
Anyway, as I got my own experiences in entrepreneurship and continued reading about others, I started learning that so much of entrepreneurship is people skills. “Clever” is important, but really only in the visioning stage. Coming up with a really cool vision really does require a deep understanding of the market, and the creativity to figure out where the industry is going.
But once you’ve got a vision for a business, then what? I have a vision to create a new kind of retail experience where you use technology to figure out what kind of look you want. Ok, great. So, do I have the gumption to go out and:
Get funding Recruit a staff Train a staff Motivate a staff Attract customers Etc. Clever started with the vision, and then it took a seat while “tenacity”, “optimism” and people skills stood up.
The takeaway for me is just that to develop yourself as a successful businessperson or entrepreneur, it’s not enough to just know theories of business (the long tail, crossing the chasm, etc.) or to be smart. It’s also not enough to know your business fundamentals (the concept of a budget, operational planning, sales & marketing, management concepts, basic planning skills). You also have to develop people skills and emotional resiliency. I think part of being a great businessperson is also about being great at things besides just business.
So the next time you’re out just having fun with friends, as far as I’m concerned, you’re also working on your business skills!